Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Melco Resorts & Entertainment Limited (MLCO). MLCO is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 23.5, which compares to its industry's average of 34.00. Over the past 52 weeks, MLCO's Forward P/E has been as high as 38.28 and as low as 12.10, with a median of 17.72.
We also note that MLCO holds a PEG ratio of 0.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MLCO's industry currently sports an average PEG of 1.27. MLCO's PEG has been as high as 1.11 and as low as 0.26, with a median of 0.48, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MLCO has a P/S ratio of 0.78. This compares to its industry's average P/S of 1.48.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Melco Resorts & Entertainment Limited is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MLCO feels like a great value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Melco Resorts & Entertainment Limited (MLCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
